USA Today reports:
Federal authorities have charged a Wall Street veteran with running a Ponzi scheme that prosecutors allege lost a staggering $50 billion.
Bernard Madoff, founder of Bernard L. Madoff Investment Securities, 70, was charged on Thursday by the Manhattan U.S. Attorney`s office and the Securities and Exchange Commission with securities fraud. The charge comes a day after the complaint says Madoff told some high-level employees that his investment management business was a "fraud" and "basically, a giant Ponzi scheme."
The U.S. Attorney`s complaint accuses Madoff of losing some of his investors` money on bad trades, then attempting to hide it by replacing that lost money with cash from his other investors. Madoff`s investment management business had between 11 and 25 clients and $17.1 billion in assets as of a Jan. 7 filing, the complaint says, and one of Madoff`s senior employees had "several million" under his management.
The scheme finally came unraveled because Madoff`s clients asked for $7 billion in redemptions as of the first week of December, the complaint says, and Madoff couldn`t come up with the cash to cover the requests.
Authorities say Madoff told senior employees at a private meeting at his apartment in New York that he planned to turn himself in within a week and that he was "finished" and had "absolutely nothing." Madoff estimated he had lost at least $50 billion but first wanted to pay out his remaining $200 million to $300 million to employees, family and friends, the complaint says.
Fifty billion here, fifty billion there, pretty soon we`re talking about real money.
The government will presumably have to bail out Madoff`s investors, so that`s all the money that could have gone to bailing out Detroit (after all, Madoff`s investors don`t actually make anything, so they come first).
Oh, I forgot, we can just make up more money at no expense. Never mind!
Anyway, that reminds me of what a brilliant career move I made from changing from being a corporate executive to being a writer. Sure, it may not have seemed like that smart a switch from the perspective of my net worth and all that, but here`s the thing: writers don`t retire, thus positioning me perfectly for our coming Work Until You Die economy.
In other kinds of jobs, you reach a point where you just feel too old to keep making the 7am flight to Dallas, so you want to retire. But writers can keep shuffling from their bedroom to their home office indefinitely.
Sure, when I`m 80, I won`t have as many original insights as I do now. But, I have too many now. I`ll be more popular then.